Systems and methods for establishing first on the follow trading priority in electronic trading systems

ABSTRACT

A trading system transitions from a first state to a second state and may award a participant, when one or more criteria and/or a status of trading rights are met, with trading priority in the second state to trade on an incoming contra order. The participant may also have an associated order modified as a result of an incoming contra order and/or be caused to automatically trade on an incoming contra order.

CROSS REFERENCE TO RELATED APPLICATION

This application is a continuation in part of co-pending U.S. patentapplication Ser. No. 11/328,814, filed Jan. 9, 2006, which is herebyincorporated by reference herein in its entirety.

GUIDELINES FOR INTERPRETING THE PRESENT APPLICATION Terms

The term “product” means any machine, manufacture and/or composition ofmatter, unless expressly specified otherwise.

The term “process” means any process, algorithm, method or the like,unless expressly specified otherwise.

Each process (whether called a method, algorithm or otherwise)inherently includes one or more steps, and therefore all references to a“step” or “steps” of a process have an inherent antecedent basis in themere recitation of the term ‘process’ or a like term. Accordingly, anyreference in a claim to a ‘step’ or ‘steps’ of a process has sufficientantecedent basis.

The term “invention” and the like mean “the one or more inventionsdisclosed in this application”, unless expressly specified otherwise.

The terms “an embodiment”, “embodiment”, “embodiments”, “theembodiment”, “the embodiments”, “one or more embodiments”, “someembodiments”, “certain embodiments”, “one embodiment”, “anotherembodiment” and the like mean “one or more (but not all) embodiments ofthe disclosed invention(s)”, unless expressly specified otherwise.

The term “variation” of an invention means an embodiment of theinvention, unless expressly specified otherwise.

A reference to “another embodiment” in describing an embodiment does notimply that the referenced embodiment is mutually exclusive with anotherembodiment (e.g., an embodiment described before the referencedembodiment), unless expressly specified otherwise.

The terms “including”, “comprising” and variations thereof mean“including but not limited to”, unless expressly specified otherwise.

The terms “a”, “an” and “the” mean “one or more”, unless expresslyspecified otherwise.

The term “plurality” means “two or more”, unless expressly specifiedotherwise.

The term “herein” means “in the present application, including anythingwhich may be incorporated by reference”, unless expressly specifiedotherwise.

The phrase “at least one of”, when such phrase modifies a plurality ofthings (such as an enumerated list of things), means any combination ofone or more of those things, unless expressly specified otherwise. Forexample, the phrase “at least one of a widget, a car and a wheel” meanseither (i) a widget, (ii) a car, (iii) a wheel, (iv) a widget and a car,(v) a widget and a wheel, (vi) a car and a wheel, or (vii) a widget, acar and a wheel. The phrase “at least one of”, when such phrase modifiesa plurality of things, does not mean “one of each of” the plurality ofthings.

Numerical terms such as “one”, “two”, etc. when used as cardinal numbersto indicate quantity of something (e.g., one widget, two widgets), meanthe quantity indicated by that numerical term, but do not mean at leastthe quantity indicated by that numerical term. For example, the phrase“one widget” does not mean “at least one widget”, and therefore thephrase “one widget” does not cover, e.g., two widgets.

The phrase “based on” does not mean “based only on”, unless expresslyspecified otherwise. In other words, the phrase “based on” describesboth “based only on” and “based at least on”. The phrase “based at leaston” is equivalent to the phrase “based at least in part on”.

The term “represent” and like terms are not exclusive, unless expresslyspecified otherwise. For example, the term “represents” do not mean“represents only”, unless expressly specified otherwise. In other words,the phrase “the data represents a credit card number” describes both“the data represents only a credit card number” and “the data representsa credit card number and the data also represents something else”.

The term “whereby” is used herein only to precede a clause or other setof words that express only the intended result, objective or consequenceof something that is previously and explicitly recited. Thus, when theterm “whereby” is used in a claim, the clause or other words that theterm “whereby” modifies do not establish specific further limitations ofthe claim or otherwise restricts the meaning or scope of the claim.

The term “e.g.” and like terms mean “for example”, and thus does notlimit the term or phrase it explains. For example, in the sentence “thecomputer sends data (e.g., instructions, a data structure) over theInternet”, the term “e.g.” explains that “instructions” are an exampleof “data” that the computer may send over the Internet, and alsoexplains that “a data structure” is an example of “data” that thecomputer may send over the Internet. However, both “instructions” and “adata structure” are merely examples of “data”, and other things besides“instructions” and “a data structure” can be “data”.

The term “respective” and like terms mean “taken individually”. Thus iftwo or more things have “respective” characteristics, then each suchthing has its own characteristic, and these characteristics can bedifferent from each other but need not be. For example, the phrase “eachof two machines has a respective function” means that the first suchmachine has a function and the second such machine has a function aswell. The function of the first machine may or may not be the same asthe function of the second machine.

The term “i.e.” and like terms mean “that is”, and thus limits the termor phrase it explains. For example, in the sentence “the computer sendsdata (i.e., instructions) over the Internet”, the term “i.e.” explainsthat “instructions” are the “data” that the computer sends over theInternet.

Any given numerical range shall include whole and fractions of numberswithin the range. For example, the range “1 to 10” shall be interpretedto specifically include whole numbers between 1 and 10 (e.g., 1, 2, 3,4, . . . 9) and non-whole numbers (e.g., 1.1, 1.2, . . . 1.9).

Where two or more terms or phrases are synonymous (e.g., because of anexplicit statement that the terms or phrases are synonymous), instancesof one such term/phrase does not mean instances of another suchterm/phrase must have a different meaning. For example, where astatement renders the meaning of “including” to be synonymous with“including but not limited to”, the mere usage of the phrase “includingbut not limited to” does not mean that the term “including” meanssomething other than “including but not limited to”.

Determining

The term “determining” and grammatical variants thereof (e.g., todetermine a price, determining a value, determine an object which meetsa certain criterion) is used in an extremely broad sense. The term“determining” encompasses a wide variety of actions and therefore“determining” can include calculating, computing, processing, deriving,investigating, looking up (e.g., looking up in a table, a database oranother data structure), ascertaining and the like. Also, “determining”can include receiving (e.g., receiving information), accessing (e.g.,accessing data in a memory) and the like. Also, “determining” caninclude resolving, selecting, choosing, establishing, and the like.

The term “determining” does not imply certainty or absolute precision,and therefore “determining” can include estimating, extrapolating,predicting, guessing and the like.

The term “determining” does not imply that mathematical processing mustbe performed, and does not imply that numerical methods must be used,and does not imply that an algorithm or process is used.

The term “determining” does not imply that any particular device must beused. For example, a computer need not necessarily perform thedetermining.

Indication

The term “indication” is used in an extremely broad sense. The term“indication” may, among other things, encompass a sign, symptom, ortoken of something else.

The term “indication” may be used to refer to any indicia and/or otherinformation indicative of or associated with a subject, item, entity,and/or other object and/or idea.

As used herein, the phrases “information indicative of” and “indicia”may be used to refer to any information that represents, describes,and/or is otherwise associated with a related entity, subject, orobject.

Indicia of information may include, for example, a code, a reference, alink, a signal, an identifier, and/or any combination thereof and/or anyother informative representation associated with the information.

In some embodiments, indicia of information (or indicative of theinformation) may be or include the information itself and/or any portionor component of the information. In some embodiments, an indication mayinclude a request, a solicitation, a broadcast, and/or any other form ofinformation gathering and/or dissemination.

Forms of Sentences

Where a limitation of a first claim would cover one of a feature as wellas more than one of a feature (e.g., a limitation such as “at least onewidget” covers one widget as well as more than one widget), and where ina second claim that depends on the first claim, the second claim uses adefinite article “the” to refer to the limitation (e.g., “the widget”),this does not imply that the first claim covers only one of the feature,and this does not imply that the second claim covers only one of thefeature (e.g., “the widget” can cover both one widget and more than onewidget).

When an ordinal number (such as “first”, “second”, “third” and so on) isused as an adjective before a term, that ordinal number is used (unlessexpressly specified otherwise) merely to indicate a particular feature,such as to distinguish that particular feature from another feature thatis described by the same term or by a similar term. For example, a“first widget” may be so named merely to distinguish it from, e.g., a“second widget”. Thus, the mere usage of the ordinal numbers “first” and“second” before the term “widget” does not indicate any otherrelationship between the two widgets, and likewise does not indicate anyother characteristics of either or both widgets. For example, the mereusage of the ordinal numbers “first” and “second” before the term“widget” (1) does not indicate that either widget comes before or afterany other in order or location; (2) does not indicate that either widgetoccurs or acts before or after any other in time; and (3) does notindicate that either widget ranks above or below any other, as inimportance or quality. In addition, the mere usage of ordinal numbersdoes not define a numerical limit to the features identified with theordinal numbers. For example, the mere usage of the ordinal numbers“first” and “second” before the term “widget” does not indicate thatthere must be no more than two widgets.

When a single device or article is described herein, more than onedevice/article (whether or not they cooperate) may alternatively be usedin place of the single device/article that is described. Accordingly,the functionality that is described as being possessed by a device mayalternatively be possessed by more than one device/article (whether ornot they cooperate).

Similarly, where more than one device or article is described herein(whether or not they cooperate), a single device/article mayalternatively be used in place of the more than one device or articlethat is described. For example, a plurality of computer-based devicesmay be substituted with a single computer-based device. Accordingly, thevarious functionality that is described as being possessed by more thanone device or article may alternatively be possessed by a singledevice/article.

The functionality and/or the features of a single device that isdescribed may be alternatively embodied by one or more other deviceswhich are described but are not explicitly described as having suchfunctionality/features. Thus, other embodiments need not include thedescribed device itself, but rather can include the one or more otherdevices which would, in those other embodiments, have suchfunctionality/features.

Disclosed Examples and Terminology are not Limiting

Neither the Title (set forth at the beginning of the first page of thepresent application) nor the Abstract (set forth at the end of thepresent application) is to be taken as limiting in any way as the scopeof the disclosed invention(s). An Abstract has been included in thisapplication merely because an Abstract of not more than 150 words isrequired under 37 C.F.R. §1.72(b).

The title of the present application and headings of sections providedin the present application are for convenience only, and are not to betaken as limiting the disclosure in any way.

Numerous embodiments are described in the present application, and arepresented for illustrative purposes only. The described embodiments arenot, and are not intended to be, limiting in any sense. The presentlydisclosed invention(s) are widely applicable to numerous embodiments, asis readily apparent from the disclosure. One of ordinary skill in theart will recognize that the disclosed invention(s) may be practiced withvarious modifications and alterations, such as structural, logical,software, and electrical modifications. Although particular features ofthe disclosed invention(s) may be described with reference to one ormore particular embodiments and/or drawings, it should be understoodthat such features are not limited to usage in the one or moreparticular embodiments or drawings with reference to which they aredescribed, unless expressly specified otherwise.

No embodiment of method steps or product elements described in thepresent application constitutes the invention claimed herein, or isessential to the invention claimed herein, or is coextensive with theinvention claimed herein, except where it is either expressly stated tobe so in this specification or expressly recited in a claim.

All words in every claim have the broadest scope of meaning they wouldhave been given by a person of ordinary skill in the art as of thepriority date. No term used in any claim is specially defined or limitedby this application except where expressly so stated either in thisspecification or in a claim.

The preambles of the claims that follow recite purposes, benefits andpossible uses of the claimed invention only and do not limit the claimedinvention.

The present disclosure is not a literal description of all embodimentsof the invention(s). Also, the present disclosure is not a listing offeatures of the invention(s) which must be present in all embodiments.

Devices that are described as in communication with each other need notbe in continuous communication with each other, unless expresslyspecified otherwise. On the contrary, such devices need only transmit toeach other as necessary or desirable, and may actually refrain fromexchanging data most of the time. For example, a machine incommunication with another machine via the Internet may not transmitdata to the other machine for long period of time (e.g., weeks at atime). In addition, devices that are in communication with each othermay communicate directly or indirectly through one or moreintermediaries.

A description of an embodiment with several components or features doesnot imply that all or even any of such components/features are required.On the contrary, a variety of optional components are described toillustrate the wide variety of possible embodiments of the presentinvention(s). Unless otherwise specified explicitly, nocomponent/feature is essential or required.

Although process steps, algorithms or the like may be described in aparticular sequential order, such processes may be configured to work indifferent orders. In other words, any sequence or order of steps thatmay be explicitly described does not necessarily indicate a requirementthat the steps be performed in that order. The steps of processesdescribed herein may be performed in any order practical. Further, somesteps may be performed simultaneously despite being described or impliedas occurring non-simultaneously (e.g., because one step is describedafter the other step). Moreover, the illustration of a process by itsdepiction in a drawing does not imply that the illustrated process isexclusive of other variations and modifications thereto, does not implythat the illustrated process or any of its steps are necessary to theinvention(s), and does not imply that the illustrated process ispreferred.

Although a process may be described as including a plurality of steps,that does not imply that all or any of the steps are preferred,essential or required. Various other embodiments within the scope of thedescribed invention(s) include other processes that omit some or all ofthe described steps. Unless otherwise specified explicitly, no step isessential or required.

Although a process may be described singly or without reference to otherproducts or methods, in an embodiment the process may interact withother products or methods. For example, such interaction may includelinking one business model to another business model. Such interactionmay be provided to enhance the flexibility or desirability of theprocess.

Although a product may be described as including a plurality ofcomponents, aspects, qualities, characteristics and/or features, thatdoes not indicate that any or all of the plurality are preferred,essential or required. Various other embodiments within the scope of thedescribed invention(s) include other products that omit some or all ofthe described plurality.

An enumerated list of items (which may or may not be numbered) does notimply that any or all of the items are mutually exclusive, unlessexpressly specified otherwise. Likewise, an enumerated list of items(which may or may not be numbered) does not imply that any or all of theitems are comprehensive of any category, unless expressly specifiedotherwise. For example, the enumerated list “a computer, a laptop, aPDA” does not imply that any or all of the three items of that list aremutually exclusive and does not imply that any or all of the three itemsof that list are comprehensive of any category.

An enumerated list of items (which may or may not be numbered) does notimply that any or all of the items are equivalent to each other orreadily substituted for each other.

All embodiments are illustrative, and do not imply that the invention orany embodiments were made or performed, as the case may be.

Computing

It will be readily apparent to one of ordinary skill in the art that thevarious processes described herein may be implemented by, e.g.,appropriately programmed general purpose computers, special purposecomputers and computing devices. Typically a processor (e.g., one ormore microprocessors, one or more microcontrollers, one or more digitalsignal processors) will receive instructions (e.g., from a memory orlike device), and execute those instructions, thereby performing one ormore processes defined by those instructions.

A “processor” means one or more microprocessors, central processingunits (CPUs), computing devices, microcontrollers, digital signalprocessors, or like devices or any combination thereof.

Thus a description of a process is likewise a description of anapparatus for performing the process. The apparatus that performs theprocess can include, e.g., a processor and those input devices andoutput devices that are appropriate to perform the process.

Further, programs that implement such methods (as well as other types ofdata) may be stored and transmitted using a variety of media (e.g.,computer readable media) in a number of manners. In some embodiments,hard-wired circuitry or custom hardware may be used in place of, or incombination with, some or all of the software instructions that canimplement the processes of various embodiments. Thus, variouscombinations of hardware and software may be used instead of softwareonly.

The term “computer-readable medium” refers to any medium, a plurality ofthe same, or a combination of different media, that participate inproviding data (e.g., instructions, data structures) which may be readby a computer, a processor or a like device. Such a medium may take manyforms, including but not limited to, non-volatile media, volatile media,and transmission media. Non-volatile media include, for example, opticalor magnetic disks and other persistent memory. Volatile media includedynamic random access memory (DRAM), which typically constitutes themain memory. Transmission media include coaxial cables, copper wire andfiber optics, including the wires that comprise a system bus coupled tothe processor. Transmission media may include or convey acoustic waves,light waves and electromagnetic emissions, such as those generatedduring radio frequency (RF) and infrared (IR) data communications.Common forms of computer-readable media include, for example, a floppydisk, a flexible disk, hard disk, magnetic tape, any other magneticmedium, a CD-ROM, DVD, any other optical medium, punch cards, papertape, any other physical medium with patterns of holes, a RAM, a PROM,an EPROM, a FLASH-EEPROM, any other memory chip or cartridge, a carrierwave as described hereinafter, or any other medium from which a computercan read.

Various forms of computer readable media may be involved in carryingdata (e.g. sequences of instructions) to a processor. For example, datamay be (i) delivered from RAM to a processor; (ii) carried over awireless transmission medium; (iii) formatted and/or transmittedaccording to numerous formats, standards or protocols, such as Ethernet(or IEEE 802.3), SAP, ATP, Bluetooth™, and TCP/IP, TDMA, CDMA, and 3G;and/or (iv) encrypted to ensure privacy or prevent fraud in any of avariety of ways well known in the art.

Thus a description of a process is likewise a description of acomputer-readable medium storing a program for performing the process.The computer-readable medium can store (in any appropriate format) thoseprogram elements which are appropriate to perform the method.

Just as the description of various steps in a process does not indicatethat all the described steps are required, embodiments of an apparatusinclude a computer/computing device operable to perform some (but notnecessarily all) of the described process.

Likewise, just as the description of various steps in a process does notindicate that all the described steps are required, embodiments of acomputer-readable medium storing a program or data structure include acomputer-readable medium storing a program that, when executed, cancause a processor to perform some (but not necessarily all) of thedescribed process.

Where databases are described, it will be understood by one of ordinaryskill in the art that (i) alternative database structures to thosedescribed may be readily employed, and (ii) other memory structuresbesides databases may be readily employed. Any illustrations ordescriptions of any sample databases presented herein are illustrativearrangements for stored representations of information. Any number ofother arrangements may be employed besides those suggested by, e.g.,tables illustrated in drawings or elsewhere. Similarly, any illustratedentries of the databases represent exemplary information only; one ofordinary skill in the art will understand that the number and content ofthe entries can be different from those described herein. Further,despite any depiction of the databases as tables, other formats(including relational databases, object-based models and/or distributeddatabases) could be used to store and manipulate the data typesdescribed herein. Likewise, object methods or behaviors of a databasecan be used to implement various processes, such as the describedherein. In addition, the databases may, in a known manner, be storedlocally or remotely from a device which accesses data in such adatabase.

Various embodiments can be configured to work in a network environmentincluding a computer that is in communication (e.g., via acommunications network) with one or more devices. The computer maycommunicate with the devices directly or indirectly, via any wired orwireless medium (e.g. the Internet, LAN, WAN or Ethernet, Token Ring, atelephone line, a cable line, a radio channel, an optical communicationsline, commercial on-line service providers, bulletin board systems, asatellite communications link, a combination of any of the above). Eachof the devices may themselves comprise computers or other computingdevices, such as those based on the Intel® Pentium® or Centrino™processor, that are adapted to communicate with the computer. Any numberand type of devices may be in communication with the computer.

In an embodiment, a server computer or centralized authority may not benecessary or desirable. For example, the present invention may, in anembodiment, be practiced on one or more devices without a centralauthority. In such an embodiment, any functions described herein asperformed by the server computer or data described as stored on theserver computer may instead be performed by or stored on one or moresuch devices.

Where a process is described, in an embodiment the process may operatewithout any user intervention. In another embodiment, the processincludes some human intervention (e.g., a step is performed by or withthe assistance of a human).

Continuing Applications

The present disclosure provides, to one of ordinary skill in the art, anenabling description of several embodiments and/or inventions. Some ofthese embodiments and/or inventions may not be claimed in the presentapplication, but may nevertheless be claimed in one or more continuingapplications that claim the benefit of priority of the presentapplication. Applicant intends to file additional applications to pursuepatents for subject matter that has been disclosed and enabled but notclaimed in the present application.

U.S.C. §112 Paragraph 6

In a claim, a limitation of the claim which includes the phrase “meansfor” or the phrase “step for” means that 35 U.S.C. §112, paragraph 6,applies to that limitation.

In a claim, a limitation of the claim which does not include the phrase“means for” or the phrase “step for” means that 35 U.S.C. §112,paragraph 6 does not apply to that limitation, regardless of whetherthat limitation recites a function without recitation of structure,material or acts for performing that function. For example, in a claim,the mere use of the phrase “step of” or the phrase “steps of” inreferring to one or more steps of the claim or of another claim does notmean that 35 U.S.C. §112, paragraph 6, applies to that step(s).

With respect to a means or a step for performing a specified function inaccordance with 35 U.S.C. §112, paragraph 6, the correspondingstructure, material or acts described in the specification, andequivalents thereof, may perform additional functions as well as thespecified function.

Computers, processors, computing devices and like products arestructures that can perform a wide variety of functions. Such productscan be operable to perform a specified function by executing one or moreprograms, such as a program stored in a memory device of that product orin a memory device which that product accesses. Unless expresslyspecified otherwise, such a program need not be based on any particularalgorithm, such as any particular algorithm that might be disclosed inthe present application. It is well known to one of ordinary skill inthe art that a specified function may be implemented via differentalgorithms, and any of a number of different algorithms would be a meredesign choice for carrying out the specified function.

Therefore, with respect to a means or a step for performing a specifiedfunction in accordance with 35 U.S.C. §112, paragraph 6, structurecorresponding to a specified function includes any product programmed toperform the specified function. Such structure includes programmedproducts which perform the function, regardless of whether such productis programmed with (i) a disclosed algorithm for performing thefunction, (ii) an algorithm that is similar to a disclosed algorithm, or(iii) a different algorithm for performing the function.

Disclaimer

Numerous references to a particular embodiment does not indicate adisclaimer or disavowal of additional, different embodiments, andsimilarly references to the description of embodiments which all includea particular feature does not indicate a disclaimer or disavowal ofembodiments which do not include that particular feature. A cleardisclaimer or disavowal in the present application shall be prefaced bythe phrase “does not include” or by the phrase “cannot perform”.

Incorporation by Reference

Any patent, patent application or other document referred to herein isincorporated by reference into this patent application as part of thepresent disclosure, but only for purposes of written description inaccordance with 35 U.S.C. §112, paragraph 1 and enablement in accordancewith 35 U.S.C. §112, paragraph 1, and should in no way be used to limit,define, or otherwise construe any term of the present application wherethe present application, without such incorporation by reference, wouldnot have failed to provide an ascertainable meaning, but rather wouldhave allowed an ascertainable meaning for such term to be provided.Thus, the person of ordinary skill in the art need not have been in anyway limited by any embodiments provided in the reference.

Any incorporation by reference does not, in and of itself, imply anyendorsement of, ratification of or acquiescence in any statements,opinions, arguments or characterizations contained in any incorporatedpatent, patent application or other document, unless explicitlyspecified otherwise in this patent application.

Prosecution History

In interpreting the present application (which includes the claims), oneof ordinary skill in the art shall refer to the prosecution history ofthe present application, but not to the prosecution history of any otherpatent or patent application, regardless of whether there are otherpatent applications that are considered related to the presentapplication.

INTRODUCTION

The present invention relates to electronic systems and methods forobtaining trading exclusivity and/or trading priority in electronictrading systems.

BACKGROUND OF THE INVENTION

In electronic trading systems that include bids and offers for items, abid or offer that is entered by a participant may typically be enteredas available (referred to alternatively hereinafter as “clear”) to tradeto other participants. Nevertheless, certain known trading systems mayrestrict the availability to certain participant(s) under certainconditions. For example, a Bid/Offer may be available only to thecurrent market participants, i.e., those with current commitments(bids/offers). Accordingly, preferably only those customers with currentparticipation can hit or lift these incoming entries. Such bids/offersmay be considered unclear—i.e., not available to all tradingparticipants.

In one type of trading system, the uncleared bids become available toparticipants other than the current participants only after a preset orpredetermined time interval has expired (tracked by a internal systemclock or other suitable device).

One criteria that may affect order priority—e.g., the exclusive right ofcertain participants to trade on incoming orders—is the respectivepriority of participants following the transition from a first tradingstate to a second trading state. For the purposes of this application, atrading state is defined as a set of rules or conditions that govern theinteraction between trading participants.

It would be desirable to provide systems and methods that further definethe rules or conditions that govern the interaction between tradingparticipants when the system transitions from one trading state to asecond trading state.

SUMMARY OF THE INVENTION

It would be desirable to provide systems and methods that further definethe rules or conditions that govern the interaction between tradingparticipants when the system transitions from one trading state to asecond trading state.

Systems and methods for trading an item in an electronic trading systemare provided. A method according to the invention preferably includestransitioning the trading system from a first trading state to a secondtrading state. Once the trading system has transitioned to the secondstate, the method includes determining whether an existing orderqualifies for trading rights—i.e., trading priority and/orexclusivity—in the second trading state. This determining of tradingrights in the second trading state is preferably based on the status oftrading rights in the first trading state and also a set ofpredetermined criteria with respect to an incoming contra order—i.e., anorder on the other side of a trade or active market (e.g., a bid iscontra to an offer or other instruction to sell, an offer is contra to abid or instruction to buy)—in the second trading state. If the existingorder qualifies for trading rights, then the system preferably presentsthe incoming contra order for trading exclusively or semi-exclusively tothe participant associated with the existing order.

BRIEF DESCRIPTION OF THE DRAWINGS

Further features of the invention, its nature and various advantageswill be apparent from the following detailed description of thepreferred embodiments, taken in conjunction with the accompanyingdrawings, in which like reference characters refer to like partsthroughout, and in which:

FIG. 1 is an illustration of an electronic implementation of a system inaccordance with some embodiments of the present invention;

FIG. 2 is an illustration, in greater detail, of an electronicimplementation of a system in accordance with some embodiments of thepresent invention;

FIG. 3 is an illustration of an electronic trading interface inaccordance with some embodiments of the present invention; and

FIGS. 4-11 are flowcharts of various methods according to the invention.

DETAILED DESCRIPTION OF THE INVENTION

In one aspect of the invention, trading rules according to the inventiondisclosed herein relate to being “first-on-the-follow”. Thesefirst-on-the-follow rules relate to the respective priority ofparticipants following the transition from a first trading state to asecond trading state (for the purposes of this application, a tradingstate is defined as a set of rules or conditions that govern theinteraction between trading participants—transition from one tradingstate to a second trading state signifies transitioning from one set ofrules or conditions to a second set of rules or conditions).First-on-the-follow rules relate in large part to identifying theparticipant that will have the right to trade exclusively(semi-exclusively)—i.e., the exclusive bidder on incoming offers and theexclusive offeror on incoming bids—at the commencement of the new state.It should be noted that in some embodiments of the invention, the firston the follow participant may be granted exclusive or semi-exclusiverights, depending on the rules of the trading system. Any referencesherein, or in the figures, to exclusive rights should be understood torefer to either an exclusive or semi-exclusive set of rights.

Typically, first-on-the-follow priority rights are obtained by theparticipants identified as the best bidder and the best offeror (theterm best being defined as highest bidder/buyer with respect toprice/time priority and lowest offeror/seller with respect to price/timepriority) at the conclusion of the first trade state. Infirst-on-the-follow rules according to the invention, participants thatwere previously identified as the best bidder and best offeror at theconclusion of the first trade state may only obtain thefirst-on-the-follow rights in the second trade state if the best bidderand the best offeror satisfy either a certain minimum order sizerequirement, are within a certain predetermined delta (as described inmore detail below) of the best bidder and the best offeror,respectively, or satisfy a combination of the minimum order sizerequirement and the predetermined delta restriction.

Alternatively, an additional restriction with respect to obtainingfirst-on-the-follow rights may relate to the amount purchased or soldduring the first trade state by the prospective first-on-the-followparticipant. It should be noted that first-on-the follow rights mayobtain a particular advantage for the participant at least because theserights, in some embodiments of the invention, may entitle theparticipants to priority with respect to any incoming orders at thecommencement of the second trading state.

With respect to hidden size, as described below, a participant's hiddensize may be considered in satisfying the participant's minimum sizerequirement for obtaining first-on-the-follow rights.

In yet another rule according to the invention, if a participantsatisfies first-on-the-follow requirements, then the participant mayhave a preset instruction to the system to either reduce his bid by apredetermined increment or increase his offer by an increment in thesecond trading state. Preferably, the respective increase or decreasereduces his exposure to an incoming order while maintaining hisfirst-on-the-follow position, and the trading privileges, such as, forexample, the exclusive right to trade against incoming orders,associated therewith. Alternatively, exposure may be reduced by reducingthe size of the first on the follow order.

In an alternative embodiment, the order that is first-on-the-followshould preferably be within a predetermined delta of the best contraorder, or the incoming order should preferably satisfy some combinationof the threshold size and the predetermined delta in order to only beshown to or, alternatively, to only be available to be traded by, selectparticipants that are first on the follow.

With respect to yet another embodiment of the invention, hiddensize—i.e., a portion of the order that is not shown to the rest of theparticipants, but, if acted upon, is tradable—may also count towardsatisfying the minimum size requirement of the order either as the firston the follow order or the current order in the system.

Yet another aspect of the invention provides rules associated with amethod that restricts all incoming orders to a select number of traders.For example, the exclusive bidder or offeror preferably has an option toexclusively trade on an incoming order, although another participant isbehind the exclusive bidder or offeror and has the ability to indicate awillingness to hit the incoming bid or lift the incoming offer if theexclusive bidder or offeror refuses to act on the incoming order. In onerule according to the invention, the exclusive bidder or offeror maypreferably set, or have set, his respective default position to trade onan incoming bid or offer when there is another participant who hasindicated a willingness to hit the incoming bid or lift the incomingoffer. Thus, the default position becomes a “take when (another partyhas indicated that he is willing . . . ) taken” or “hit when (anotherparty has indicated that he is willing . . . ) hit.”

This rule may preferably be implemented in at least a state where bidsand offers are posted—i.e., a bid/offer state—as well as a state whereintrades actually occur and bids and offers are matched.

It should be noted that the default position described herein for thetake-when-taken or hit-when-hit order may preferably be furtherrestricted to only act when the incoming order is a predetermined delta,as described in more detail above, from the headline price (see element304 in FIG. 3) in bid/offer state, or the trading price in the state inwhich matches occur.

Referring to FIG. 1, exemplary system 100 for implementing the presentinvention is shown. As illustrated, system 100 may include one or moreworkstations 101. Workstations 101 may be local or remote, and areconnected by one or more communications links 102 to computer network103 that is linked via communications links 105 to server 104. Server104 is linked via communications link 110 to back office clearing center112.

In system 100, server 104 may be any suitable server, processor,computer, or data processing device, or combination of the same. Server104 and back office clearing center 112 may form part of the electronictrading system. Furthermore, server 104 may also contain an electronictrading system and application programming interface and merely transmita Graphical User Interface or other display screens to the user at theuser workstation, or the Graphical User Interface may reside onWorkstation 101.

Computer network 103 may be any suitable computer network including theInternet, an intranet, a wide-area network (WAN), a local-area network(LAN), a wireless network, a digital subscriber line (DSL) network, aframe relay network, an asynchronous transfer mode (ATM) network, avirtual private network (VPN), or any combination of any of the same.Communications links 102 and 105 may be any communications linkssuitable for communicating data between workstations 101 and server 104,such as network links, dial-up links, wireless links, hard 15 wiredlinks, etc.

Workstations 101 may be personal computers, laptop computers, mainframecomputers, dumb terminals, data displays, Internet browsers, PersonalDigital Assistants (PDAs), two-way pagers, wireless terminals, portabletelephones, programmed computers having memory, the programmed computerusing the memory for implementing trading models, etc., or anycombination of the same. Workstations 101 may be used to implement theelectronic trading system application and application programminginterface according to the invention.

Back office clearing center 112 may be any suitable equipment, such as acomputer, a laptop computer, a mainframe computer, etc., or anycombination of the same, for causing transactions to be cleared througha clearinghouse and/or verifying that transactions are cleared through aclearinghouse. (This clearing is not to be confused with being clear totrade, which is defined in more detail above.) Communications link 110may be any communications links suitable for communicating data betweenserver 104 and back office clearing center 112, such as network links,dial-up links, wireless links, hard-wired links, etc.

The server, the back office clearing center, and one of theworkstations, which are depicted in FIG. 1, are illustrated in moredetail in FIG. 2. Referring to FIG. 2, workstation 101 may includeprocessor 201, display 202, input device 203, and memory 204, which maybe interconnected. In a preferred embodiment, memory 204 contains astorage device for storing a workstation program for controllingprocessor 201. The storage device may include software stored on asuitable storage medium such as a disk. Memory 204 also preferablycontains an electronic trading system application 216 according to theinvention.

Electronic trading system application 216 may preferably includeapplication program interface 215, or alternatively, as described above,electronic trading system application 216 may be resident in the memoryof server 104. In this embodiment, the electronic trading system maycontain application program interface 215 as a discrete application fromthe electronic trading system application which also may be includedtherein. The only distribution to the user may then be a Graphical UserInterface which allows the user to interact with electronic tradingsystem application 216 resident at server 104.

Processor 201 uses the workstation program to present on display 202electronic trading system application information relating to marketconditions received through communication link 102 and trading commandsand values transmitted by a user of workstation 101. Furthermore, inputdevice 203 may be used to manually enter commands and values in orderfor these commands and values to be communicated to the electronictrading system.

FIG. 3 shows an illustrative trading interface 300. Interface 300 ispreferably for interactive trading and is adapted for implementingsystems and methods according to the present invention. The interfaceincludes a top line 301 (alternatively referred to herein as the touchline, or the headline.) Top line 301 may preferably be adapted toinclude the price that should be initially aggressed to start a tradeor, alternatively, top line 301 may show the status of the actualaggressed trade. In either case, top line 301 is typically located atthe top of the quad (quad being defined for purposes of this applicationas the display area related to trading of a particular instrument.) Topline 301 may include item 302, price 304, size 306 and last price 308.Interface 300 also includes market depth information 310, which showsprice and size for items that have not yet been traded (commonlyreferred to as the order book, or, simply, the book). Also shown ininterface 300 are bid and offer stacks 312 and 314, respectively. Bidand offer stacks 312 and 314 may indicate the size of one or many marketparticipants that are bidding or offering at the current price 304. Notethat price 304 in this exemplary example is shown in a traditionalUnited States Government Bond pricing format.

Typically, an incoming order that is not clear to trade is indicated bya visual indicator—e.g., an asterisk preferably adjacent to the priceassociated with the new order (See, asterisk adjacent to price 304 inFIG. 3). In the embodiment shown in FIG. 3, in the particularcircumstance where only a portion of an order is not cleared to trade, avisual indicator may be displayed in bid and offer stacks 312 and 314adjacent the volume of the partially cleared order to indicate that onlya portion of the order is cleared to be traded, or in some othersuitable location which differentiates the partially cleared order fromthe totally uncleared order or from the totally clear order.

FIG. 4 is a flow chart that describes one embodiment of a methodaccording to the invention. Step 402 shows that the trading systemtransitions from a first state to a second state. The interface in FIG.3 may show a trading state such as a bid/offer state in whichparticipants enter their respective bids and offers. Other states mayinclude a trading state wherein certain of the participants may engagein trading and subsequent negotiations associated therewith. These andother exemplary states are described in detail in U.S. Pat. No.6,560,580 which is hereby incorporated by reference in its entirety.Following the conclusion of activity or other termination of the tradingstate that allows trading and negotiation between participants, thesystem may transition to a bid/offer state or to some other suitabletrading state. As such, the trader with first on the follow priority mayenjoy exclusive trading rights to trade on incoming contra orders whenthe system transitions a trading state to bid/offer state.

Step 404 queries whether a first on the follow order in the systemsatisfies a minimum size requirement. Step 406 shows that, if the firston the follow order satisfies the minimum size requirement, then theparticipant associated with the first on the follow order is rewardedwith exclusive rights to trade against the incoming contra order(assuming, in certain embodiments, that the incoming order hasprice/time priority over other current orders and that the incomingorder also satisfies the minimum size requirement, see FIGS. 7-9, andthe corresponding text).

It should be noted that each of FIGS. 4-9 share similar steps X02, X06,and X08. The FIGs. are differentiated, for the most part, based on thequery step of X04 in which each flow chart describes a unique query.

FIG. 5 is a flow chart describing another embodiment of a methodaccording to the invention. Query step 504 queries whether a first onthe follow order exceeds a percentage size of the incoming order andalso exceeds a minimum size requirement. If the first on the followorder does satisfy the query, then the first on the follow participantassociated with the first on the follow order may, under certaincircumstances, be awarded an exclusive or semi-exclusive right to tradewith the incoming order.

FIG. 6 is a flow chart describing yet another embodiment of a methodaccording to the invention. Query step 604 queries whether any first onthe follow order is within a predetermined delta, as described in moredetail above, of the incoming bid or the incoming offer. If the first onthe follow order is within the predetermined delta, then the first onthe follow participant associated with the first on the follow ordermay, under certain circumstances, be awarded an exclusive orsemi-exclusive right to trade with the incoming order.

FIG. 7 is a flow chart describing still another embodiment of a methodaccording to the invention. Step 704 queries whether an incoming ordermeets a minimum size to qualify for being clear only to a first on thefollow participant or group of participants. If the incoming order meetsthe minimum size, then the incoming order may be clear to the first onthe follow participant or group of participants (step 706).

FIG. 8 is a flow chart describing yet another embodiment of a methodaccording to the invention. Step 804 queries whether an incoming orderincludes a volume that is a certain, preferably predetermined,percentage (or other suitable metric) of the volume of the first on thefollow contra order, then the incoming order may be clear to the firston the follow participant or group of participants. If the incomingorder is a certain percentage of the first on the follow contra order,then the incoming order may be clear to the first on the followparticipant or group of participants (step 806).

FIG. 9 is a flow chart describing another embodiment of a methodaccording to the invention. Step 904 queries whether an incoming orderis within a predetermined delta of the first on the follow order. If theincoming order is within a predetermined delta of the first on thefollow contra order, then the incoming order may be clear to the firston the follow participant or group of participants (step 906).

It should be noted that each of the different query steps in FIGS. 4-9may be used simultaneously with one another to provide multiple queriesthat are combined to determine whether any first on the follow order or,alternatively, any incoming order, is rewarded with exclusivity. Thus,the trading system may query numerous different queries before a currentparticipant associated with a current order is awarded exclusive orsemi-exclusive rights to trade with an incoming order.

FIG. 10 shows a flow chart that includes step 1004 that queries whetherfirst on the follow rights have been obtained. If first on the followrights have been obtained by a participant, then step 1006 teaches thateither a pre-set system default, or a participant-set feature, mayreduce the first on the follow bid or increase the first on the followoffer to preferably reduce exposure to any incoming offer/bid, whilemaintaining the first on the follow position, and the associated tradingprivileges. Exposure may also be reduced by decreasing the size of thefirst on the follow bid or offer. This reduction may be implementedindependently or together with a price adjustment as described above.

FIG. 11 shows a flow chart of yet another feature of the presentinvention. In this feature, step 1104 queries whether first on thefollow rights have been obtained by satisfying certain criteria. Iffirst on the follow rights have been obtained, then step 1106 teachesthat the electronic trading system is preferably set by either the firston the follow trader or by a system default to trade on an incoming bidor offer preferably only when there is another participant who hasindicated a willingness to hit the incoming bid or take the incomingoffer. The other participant is preferably unable to hit the incomingbid or take the incoming offer because he is behind, with respect totrading priority, the first on the follow trader.

It should be noted that this particular feature is not limited tofirst-on-the-follow but, in fact, extends to any suitable tradingsituation. Thus, any bid or offer could be placed whereby the bid isonly active if another bid, having inferior trading rights because, forexample, the inferior bid was later in time, is at the same price andhas indicated a willingness to trade.

As such, according to an embodiment of the invention as shown in FIG. 4,the trading system may be in a first state, such as a state that allowstrading and negotiation between participants (hereinafter referred to asa trading/negotiation state). At the conclusion of this state, thesystem may transition to a second state, such as a bid/offer state. Atthe transition, the system may initially identify/determine afirst-on-the-follow order/bid, which may be a bid from amongexisting/pending bids at the completion of the trading/negotiationstate, and award the participant associated with this bid with exclusivefirst-on-the-follow rights in the bid/offer state with respect to anincoming contra order/offer (e.g., a trading priority in the secondstate, such as an exclusive right to trade on an incoming contraorder/offer) if the size of the bid satisfies a minimum sizerequirement. As an example, the exclusive first-on-the-follow rights maybe such that the incoming contra offer is only shown to the participantand/or is only available to be traded on by the participant. Accordingto an embodiment of the invention, a hidden size of the bid may alsocount towards satisfying the minimum size requirement. According to anembodiment of the invention, if the first-on-the-follow bid does notsatisfy a minimum size requirement, no participant on the bid side ofthe market may be awarded exclusive first-on-the-follow rights and theincoming offers may be clear to all participants. Similarly, at thetransition of the trading/negotiation state to the bid/offer state thesystem may also identify a first-on-the-follow order/offer, which may bean offer from among the existing/pending offers, and award theparticipant associated with this offer with exclusivefirst-on-the-follow rights in the bid/offer state with respect to anincoming contra order/bid (e.g., a trading priority in the second state,such as an exclusive right to trade to trade on the incoming contraorder/bid) if the size of the offer satisfies a minimum sizerequirement. Again, a hidden size of the offer may also count towardssatisfying the minimum size requirement. If the first-on-the-followoffer does not satisfy a minimum size requirement, no participant on theoffer side of the market may be rewarded first-on-the-follow rights andall incoming bids may be clear to all participants.

According to an embodiment of the invention, a first-on-the-follow bidand a first-on-the-follow offer may be identified/determined at thetransition from a first state to a second state based on a status oftrading rights in the first state. A status of trading rights in thefirst state may include a prioritization, at the completion of the firststate, of participants based on a prioritization (e.g., resulting fromthis first state) of the existing/pending bids, and similarly theexisting/pending offers, associated with these participants. Forexample, a prioritization among existing bids, and similarly existingoffers, may be based on price and time. Here, a best existing bid/offermay be the bid/offer with the most aggressive price and if the sameprice then the “best” or oldest price time priority. As stated before,traditionally the best bid is the highest bid price and the best offerthe lowest offer price (commonly referred to as “Dollar Price”) but,alternatively, for securities whereby their price is expressed inversely(for example securities priced in terms of yield), prioritization amongexisting bids, and similarly existing offers, may be reversed and assuch, a best existing bid may be the bid with the most aggressive lowestyield (e.g., a best existing bid may be a bid with the lowest yield abidder may accept) and a best existing offer may be the offer with themost aggressive highest yield (e.g. a best existing offer may be anoffer with the highest yield a seller may sell securities at). Fordescription purposes, the present invention will be described withrespect to securities that are expressed as prices (“Dollar Price”).However, one skilled in the art will recognize that the presentinvention is also applicable to securities whereby their price isexpressed in terms of yield.

According to one embodiment of the invention, at the transition from afirst state, such as a trading/negotiation state, to a second state,such as a bid/offer state, the best existing bid may be identified asthe first-on-the-follow bid and the best existing offer may beidentified as the first-on-the-follow offer (again, one skilled in theart will recognize that other criteria may be used). One skilled in theart will recognize that an existing bid and an existing offer may be abest bid and a best offer as a result of various transactions during atrading/negotiation state. For example, as disclosed in U.S. Pat. No.6,560,580, a bid and/or an offer during a trading/negotiation state maynot be filled and/or completely filled resulting in the bid and/or offerbeing an existing best bid/existing best offer in the immediatelysubsequent bid/offer state. Similarly, a hit (sell) and/or take/lift(buy) during a trading/negotiation state may not be filled and/orcompletely filled resulting in the hit and/or take being an existingbest bid/existing best offer in the immediately subsequent bid/offerstate. According to an embodiment of the invention and as discussedabove, if the size of the best existing bid satisfies a minimum sizerequirement, the participant associated with this bid may be awardedfirst-on-the-follow rights in the bid/offer state (e.g., an exclusiveright to trade with an incoming contra offer). Alternatively, if thesize of the best existing bid does not satisfy a minimum sizerequirement, no participant on the bid side of the market may berewarded first-on-the-follow rights and all incoming offers may be clearto all participants. Similarly, if the size of the best existing offersatisfies a minimum size requirement, the participant associated withthis offer may be rewarded first-on-the-follow rights in the bid/offerstate regarding an incoming contra bid. Alternatively, if the size ofthe best existing offer does not satisfy a minimum size requirement, noparticipant on the offer side of the market may be rewardedfirst-on-the-follow rights and all incoming bids may be clear to allparticipants.

According to another embodiment of the invention, if the bid identifiedas the first-on-the-follow bid does not satisfy a minimum sizerequirement, rather than awarding no participant with first-on-thefollow rights, a different bid existing at the state transition may beidentified as a first-on-the-follow bid (e.g., the bid with the nextbest price time priority). If the size of this second identified bidsatisfies a minimum size requirement, the participant associated withthe bid may be awarded with first-on-the-follow rights in the secondstate regarding an incoming contra offer. Alternatively, if the size ofthe bid does not satisfy a minimum size requirement, another bidexisting at the state transition may be identified as afirst-on-the-follow bid, etc. A similar procedure may be followedregarding a first-on-the-follow participant on the offer side of themarket.

According to another embodiment of the invention, as the trading systemtransitions from a first state to a second state, the system mayidentify a first-on-the-follow bid (e.g., based on a status of tradingrights in the first state), and award the participant associated withthis bid with first-on-the-follow rights in the second state if theparticipant met certain transaction criteria in the first state. Oneskilled in the art will recognize that different transaction criteriamay be used. According to one embodiment of the invention, thetransaction criteria may be that the participant must have purchased atleast a minimum size requirement in the first state. For example,according to one embodiment of the invention, as the trading systemtransitions from a first state, such as a trading/negotiation state, toa second state, such as a bid/offer state, the system may identify thebest existing bid as the first-on-the-follow bid and award theparticipant associated with this bid with first-on-the-follow rights inthe bid/offer state if the participant purchased at least a minimum sizerequirement in the preceding trading state. Similarly, as the tradingsystem transitions from a first state, such as a trading/negotiationstate, to a second state, such as a bid/offer state, the system mayidentify a first-on-the-follow offer (e.g., based on a status of tradingrights in the first trading state, such as the best existing offer), andaward the participant associated with this offer withfirst-on-the-follow rights in the second trading state if theparticipant sold a minimum size requirement in the first state.

According to an embodiment of the invention, if the participantassociated with the identified first-on-the-followbid/first-on-the-follow offer does not satisfy the transaction criteriafrom the first state (e.g., a minimum purchase/sell size requirement),no participant on the respective bid side/offer side of the market maybe awarded first-on-the-follow rights and all incoming offers/bids maybe clear to all participants.

According to another embodiment of the invention, if the participantassociated with the identified first-on-the-followbid/first-on-the-follow offer does not satisfy the transaction criteriafrom the first state, rather than awarding no participant withfirst-on-the follow rights on the respective side of the market, adifferent bid/offer may be identified as the first-on-the-followbid/first-on-the-follow offer and the participant associated therewithawarded with first-on-the-follow rights in the second state if theparticipant met the transaction criteria in the first state (e.g.,purchased/sold a minimum size requirement in the first state), etc.

According to another embodiment of the invention, as the trading systemtransitions from a first state, such as a trading/negotiation state, toa second state, such as a bid/offer state, the system may identify afirst-on-the-follow bid (e.g., based on a status of trading rights inthe first state, such as a best bid), and award the participantassociated with this bid with first-on-the-follow rights in thebid/offer state if the price of the bid meets a price criteria withrespect to a price of a trade in the trading state. One skilled in theart will recognize that different price criteria may be used. Accordingto one embodiment of the invention, the price criteria may be that theprice of the first-on-the-follow bid must within a predetermined pricedelta (e.g., difference) of a price of a trade in the trading state.Similarly, as the trading system transitions from a first state, such asa trading/negotiation state, to a second state, such as a bid/offerstate, the system may also identify a first-on-the-follow offer (e.g.,based on a status of trading rights in the first trading state, such asthe best existing offer), and award the participant associated with thisoffer with first-on-the-follow rights in the second trading state if theoffer meets a price criteria with respect to a price of a trade in thetrading state.

According to an embodiment of the invention, the respective price in thefirst state to which the first-on-the-follow bid/first-on-the-followoffer may be compared may be a bid price, an offer price, a take price,and/or a hit price. According to another embodiment of the invention,the respective price from the trading state may be an average ofmultiple bid prices, offer prices, take prices, and/or hit prices.According to another embodiment of the invention, the respective pricefrom the trading state may be an average of any combination of bidprices, offer prices, take prices, and/or hit prices. According toanother embodiment of the invention, the respective price from thetrading state may be a bid price, an offer price, a take price, and/or ahit price associated with a first or last trade in the trading state.One skilled in the art will recognize that other prices from the firststate/trading state may be used.

According to an embodiment of the invention, if the identifiedfirst-on-the-follow bid/first-on-the-follow offer does not satisfy theprice criteria, no participant on the respective bid side/offer side ofthe market may be awarded first-on-the-follow rights in the second stateand all incoming offers/bids may be clear to all participants. Accordingto another embodiment of the invention, if the identifiedfirst-on-the-follow bid/first-on-the-follow offer does not satisfy theprice criteria, rather than awarding no participant with first-on-thefollow rights on the respective side of the market, a differentbid/offer may be identified as the first-on-the-followbid/first-on-the-follow offer and the participant associated therewithawarded with first-on-the-follow rights in the second state if thefirst-on-the-follow bid/first-on-the-follow offer meets the pricecriteria, etc.

According to another embodiment of the invention, as the trading systemtransitions from a first state to a second state, the system mayidentify all participants with existing/pending bids, and award one ofthese identified participants with first-on-the-follow rights toexclusively trade against an incoming contra offer in the second statebased on criteria related to transactions in the first state. Similarly,the system may identify all participants with existing offers, andreward one of these identified participants with first-on-the-followrights to exclusively trade against an incoming contra bid in the secondstate based on criteria related to transactions in the first state. Forexample, according to an embodiment of the invention, the system maydetermine which participant among the identified participants purchasedthe most (and similarly sold the most) during the first state, and awardthat participant with first-on-the-follow rights in the second state.According to another embodiment of the invention, the system maydetermine which participant among the identified participants made theearliest (e.g., first) or the latest (e.g., last) purchase (andsimilarly the earliest or the latest sale) during the first state, andreward that participant with first-on-the-follow rights in the secondstate. According to a further embodiment of the invention, the systemmay determine which participant among the identified participants madethe earliest or the latest purchase of at least a minimum sizerequirement (and similarly the earliest or the latest sale of at least aminimum size requirement) during the first state, and reward thatparticipant with first-on-the-follow rights in the second state. Oneskilled in the art will recognize that other criteria based ontransactions in the first state may be used to select a participant tobe awarded with first-on-the-follow rights.

According to another embodiment of the invention, any combination of theabove described ways, and other ways, for awarding a participant withfirst-on-the follow-rights in a second state may be used.

According to another embodiment of the invention as shown in FIG. 5, asthe trading system transitions from a first state to a second state, thesystem may award a participant with an existing order (i.e., afirst-on-the-follow bid/first-on-the-follow offer) withfirst-on-the-follow rights in the second state. However, these rightsmay not ascribe to the participant with respect to an incoming contraorder unless the size of the first-on-the follow order associated withthe participant meets a certain size criteria relative to the size ofthe incoming contra order.

According to an embodiment of the invention, any of the above describedways, and/or other ways, may be used to initially award a participantwith first-on-on-the follow rights. As a further example, as the tradingsystem transitions from a first state to a second state, the system mayidentify a first-on-the-follow order (e.g., based on a status of tradingrights in the first state, such as the best bid/best offer) and awardthe participant associated with this order with first-on-the-followrights in the second state. According to another embodiment of theinvention and as shown in FIG. 5, for a participant to be initiallyawarded with first-on-the-follow-rights in the second state, thefirst-on-the-follow order associated with the participant must alsoexceed a minimum size requirement. According to an embodiment of theinvention, a hidden size of the first-on-the-follow order may counttoward satisfying the minimum size requirement. According to anembodiment of the invention, if the first-on-the-follow order does notsatisfy the minimum size requirement, no participant on the respectiveside of the market may be awarded first-on-the-follow rights and anincoming contra order may be clear to all participants. Alternatively,according to another embodiment of the invention, a differentparticipant may be awarded with first-on-the-follow rights. One skilledin the art will recognize that criteria other than and/or in addition toa minimum size requirement may need to be met before a participant isinitially awarded with first-on-the-follow rights.

Again referring to FIG. 5, once initially awarding a participant withfirst-on-the-follow rights in the second state, when an incoming contraorder is input into the trading system in the second state, if the sizeof the first-on-the follow order associated with the participant meets acertain size criteria relative to the size of the incoming contra order,the participant may be awarded exclusive first-on-the-follow rights onthe incoming contra offer. For example, according to an embodiment ofthe invention, the size of the first-on-the follow order must exceed apercentage of the size of the incoming contra order for the participantto have exclusive rights to trade on the contra order. One skilled inthe art will recognize that other size criteria may apply. According toan embodiment of the invention, a hidden size of the first-on-the-followorder may also count toward satisfying the size requirement of theorder. According to an embodiment of the invention, if the size of thefirst-on-the-follow order does not meet the size criteria relative tothe size of the incoming contra order, no participant on the respectiveside of the market may be rewarded first-on-the-follow rights and theincoming contra offer may be clear to all participants. Alternatively,according to another embodiment of the invention, a differentparticipant may be awarded with first-on-the-follow rights with respectto the contra order.

According to another embodiment of the invention as shown in FIG. 6, asthe trading system transitions from a first state to a second state, thesystem may award a participant with an existing order (i.e., afirst-on-the-follow bid/first-on-the-follow offer) withfirst-on-the-follow rights in the second state. However, these rightsmay not ascribe to the participant with respect to an incoming contraorder unless the price of the first-on-the follow order associated withthe participant meets a certain price criteria relative to the price ofthe incoming contra order. Again, one skilled in the art will recognizethat various ways may be used to initially award a participant withfirst-on-on-the follow rights as similarly discussed above withreference to FIG. 5. One skilled in the art will also recognize thatadditional criteria, such as a minimum size requirement, may need to bemet for a participant to be initially awarded with first-on-the-followrights, as similarly discussed above with reference to FIG. 5.

Again referring to FIG. 6, once initially awarding a participant withfirst-on-the-follow rights in the second state, when an incoming contraorder is input into the trading system in the second state, if the priceof the first-on-the follow order associated with the participant meets acertain price criteria relative to the price of the incoming contraorder, the participant may be rewarded exclusive first-on-the-followrights on the incoming order. For example, according to an embodiment ofthe invention, the price of the first-on-the follow order must be withina predetermined price delta (e.g., difference) from the price of theincoming contra order for the participant to have exclusive rights totrade on the contra order. One skilled in the art will recognize thatother price criteria may apply. According to an embodiment of theinvention, if the price of the first-on-the-follow order does not meetthe price criteria relative to the price of the incoming contra order,no participant on the respective side of the market may be awardedfirst-on-the-follow rights and the incoming order may be clear to allparticipants. Alternatively, according to another embodiment of theinvention, a different participant may be awarded withfirst-on-the-follow rights with respect to the contra order.

According to another embodiment of the invention, any combination of thevarious ways discussed above in reference to FIGS. 5 and 6 for ascribingfirst-on-the-follow rights to a participant with respect to an incomingcontra order may be used.

According to another embodiment of the invention, if there are noexisting bids and/or no existing offers when transitioning from a firststate to a second state, no participant on the respective bid sideand/or offer side of the market may be awarded first-on-the-followrights upon transitioning from a first state, such as atrading/negotiation state, to the second state, such as a bid/offerstate.

According to another embodiment of the invention, during a first state,such as a trading/negotiation state, a participant may have an order(e.g., bid, offer, hit, or take) that is completely filled. As a result,as the trading system transitions to a second state, such as a bid/offerstate, the participant may have no existing order at that time and assuch, may not be able to obtain first-on-the-follow rights upontransitioning to this second state as described above. According to anembodiment of the invention, as the trading system transitions from afirst state to a second state, a participant that may or may not have anexisting order, but satisfies a status of trading rights in the firststate, such as had at least one trade matched in the first state, may beawarded with first-on-the-follow rights in the second state. Accordingto another embodiment of the invention, such a participant may only beawarded with first-on-the-follow rights in the second state if theparticipant met one or more criteria related to transactions in thefirst state. For example, according to an embodiment of the invention,upon transitioning from a first state to a second state, a tradingsystem may identify all participants that made a trade (e.g., as eithera bid or take/as either an offer or hit) in the first state (whether ornot they now have an existing order in the second state) and awarded oneof these participants with first-on-the-follow rights in the secondstate on the respective side of the market based on, for example,criteria related to transactions in the first state.

According to an embodiment of the invention, various criteria related totransactions in the first state may be used to identify/award aparticipant with first-on-the-follow rights in the second state. Forexample, according to an embodiment of the invention, a participant maybe awarded with first-on-the-follow rights if the participant made afirst or last purchase in the first state, made a first or last purchasein the first state that also meets at least a minimum size requirement,made a purchase in the first state that also meets at least a minimumsize requirement, purchased the most in the first state, made a first orlast purchase in the first state that also meets a certain pricerequirement, and/or made a purchase in the first state that also meets acertain price requirement etc. Similar criteria may apply to sales. Oneskilled in the art will recognize that first-on-the-follow rights may beawarded in other ways.

According to an embodiment of the invention, if the participant awardedwith the first-on-the-follow rights has an existing order, theparticipant may automatically be awarded the rights. Alternatively, ifthe participant awarded with the rights has no existing order, theparticipant may automatically be awarded with the first-on-the-followrights without having to enter an order. With respect tofirst-on-the-follow rights that only ascribe to a participant once acontra order is input into the trading system as described withreference to FIGS. 5 and 6, for example, the participant may beconsidered to have an order at any price and size that is necessary toobtain the rights. Alternatively, the participant may be considered tohave an order at a default price and size, either set by the tradingsystem or specified by the participant.

According to another embodiment of the invention, if the participantawarded with the first-on-the-follow rights has no existing order, theparticipant may be given the option to obtain the rights. According toan embodiment of the invention, the participant may be given apredetermined time period to make such a decision. According to anembodiment of the invention, during this time period and prior to theparticipant making a decision, the participant may be awarded with thefirst-on-the-follow rights with respect to an incoming contra order.According to an embodiment of the invention, the participant mayindicate a decision to obtain the first-on-the-follow rights withouthaving to enter an order. According to another embodiment of theinvention, the participant may need to indicate a decision to obtain thefirst-on-the-follow rights by inputting, within the predetermined timeperiod, any order or an order that meets certain criteria, such as anorder at the current best price, an order at a best price, an order thathas a size that satisfies a minimum size requirement, and/or an order ata price that meets a price criteria with respect to a price of a tradein the first state, etc. One skilled in the art will recognize thatother criteria may apply. One skilled in the art will also recognizethat a participant may indicate a decision to obtain first-on-the-followrights in other ways.

According to an embodiment of the invention, if a participant is giventhe option to obtain the first-on-the-follow rights and decides not takeaccept the rights, no participant on the respective side of the marketmay be awarded with the rights. Alternatively, a different participantmay be considered.

According to another embodiment of the invention, a plurality ofparticipants (for example, two participants) on the same side of themarket may be awarded first-on-the-follow rights to trade on an incomingcontra order, resulting in each participant having semi-exclusiverights. For example, according to an embodiment of the invention, as thetrading system transitions from a first state to a second state a firstparticipant having an existing order, such as a bid, may be initiallyawarded with first-on-the-follow rights regarding an incoming contraorder in the second state based on any of the above described ways, orother ways, for example. In addition, a second participant that has noexisting order, such as a bid, but satisfies a status of trading rightsin the first state, such as had at least one trade matched (e.g.,bid/hit) in the first state, may be given the option to obtain thefirst-on-the-follow rights in the second state. According to anotherembodiment of the invention, such a participant may only be given theoption if the participant met one or more criteria related totransactions in the first state. According to an embodiment of theinvention, various criteria related to transactions in the first statemay be used, as similarly described above (e.g., the participant mayhave made the first or last trade, may have made a trade and/or thefirst or last trade that also meets a minimum size and/or pricerequirement, and/or may have made the largest trade, and now has noremaining order). According to an embodiment of the invention, it ispossible that no second participant is identified because, for example,no participant without an existing order meets certain designatedcriteria.

According to an embodiment of the invention, assuming a secondparticipant is identified and is given the option to obtain thefirst-on-the-follow rights, the second participant may be given apredetermined time period to make such a decision. According to anembodiment of the invention, during this time period and prior to thesecond participant making a decision, this second participant and thefirst participant may each be awarded with first-on-the-follow rightswith respect to an incoming contra order. As such, during this timeperiod, the two participants may have trading priority/semi-exclusiverights. With respect to first-on-the-follow rights that only ascribe toa participant once a contra order is input into the trading system asdescribed with reference to FIGS. 5 and 6, for example, the secondparticipant may be considered to have an order at any price and sizethat is necessary to obtain the rights. Alternatively, the participantmay be considered to have an order at a default price and size, eitherset by the trading system or specified by the participant.

According to an embodiment of the invention, preferably the participantfirst to act on an incoming contra order executes the order.

According to an embodiment of the invention, if the second participantdecides to obtain the first-on-the-follow rights within thepredetermined time period, this second participant may be awardedexclusive first-on-the-follow rights, with the first participant losingthe rights. According to a further embodiment of the invention, if thesecond participant decides not to obtain the first-on-the-follow rightswithin the predetermined time period, this first participant may then beawarded exclusive first-on-the-follow rights.

According to one embodiment of the invention, for the second participantto indicate a decision to obtain the first-on-the-follow rights, theparticipant may need to input, within the predetermined time period, anyorder or alternatively, an order that meets certain criteria, assimilarly described above. According to another embodiment of theinvention, the participant may express a desire to obtain the rightswithout having to enter an order, as similarly described above. In thelatter case, with respect to first-on-the-follow rights that onlyascribe to a participant once a contra order is input into the tradingsystem as described with reference to FIGS. 5 and 6, for example, theparticipant may be considered to have an order at any price and sizethat is necessary to obtain the rights. Alternatively, the participantmay be considered to have an order at a default price and size, eitherset by the trading system or specified by the participant.

According to another embodiment of the invention, a participant awardedwith exclusive/semi-exclusive first-on-the-follow rights as describedabove may hold these rights indefinitely until an incoming contra orderat a best price (or alternatively, a best yield), for example, is inputby another participant. Upon input of a contra order at the best price,the first-on-the-follow participant may have a predetermined amount oftime in which the exclusive/semi-exclusive rights hold and in which tohit/take the contra order. If the participant does not hit/take thecontra order during this time, the contra order may becomeavailable/clear to other participants. According to embodiment of theinvention, if no other participant hits/takes the contra order, theoriginal first-on-the-follow participant with exclusive/semi-exclusivefirst-on-the-follow rights may retain these rights with respect to anext subsequently incoming contra order at the best price. According toanother embodiment of the invention, if no other participant hits/takesthe contra order, the original first-on-the-follow participant withexclusive/semi-exclusive first-on-the-follow rights may not retain theserights with respect to the next subsequently incoming contra order atthe best price.

According to another embodiment of the invention, while in the secondstate a participant that was awarded exclusive/semi-exclusivefirst-on-the-follow rights as discussed above may lose those rights(assuming there is currently no contra order to which the participanthas rights) to a second participant as a result of, for example, thesecond participant inputting an order on the same side of the market.For example, the second participant may be awarded exclusivefirst-on-the-follow rights if the participant inputs a new best bid or anew best offer and/or the size of that new bid or new offer satisfies aminimum size requirement.

According to another embodiment of the invention, even though aparticipant may be awarded exclusive/semi-exclusive first-on-the-followrights with respect to an incoming contra order in a second state, theparticipant may not have these rights with respect to a particularincoming contra order unless the order meets certain criteria. Forexample, according to an embodiment of the invention, for a participantto have first-on-the-follow rights to an incoming contra order the ordermust have price and/or time priority over other current contra orders.If the incoming order does not have price and/or time priority overother current contra orders, the order may be clear to all participants.

According to another embodiment of the invention as shown in FIG. 7, fora participant to have first-on-the-follow rights to an incoming contraorder the order must satisfy at least a minimum size requirement (e.g.,exceed a predetermined size requirement). According to an embodiment ofthe invention, a hidden size of the incoming contra order may also counttowards satisfying the minimum size requirement. If the incoming orderdoes not satisfy the minimum size requirement, the order may be clear toall participants. As such, a trading system according to an embodimentof the invention may effectively only ascribes first-on-the-followrights when it is deemed worthwhile to do so.

According to another embodiment of the invention as shown in FIG. 8, fora participant to have first-on-the-follow rights to an incoming contraorder the order must satisfy a size criteria relative to the size of theorder of the first-on-the follow participant. For example, according toan embodiment of the invention, the size of the incoming contra ordermust exceed a predetermined percentage of the size of the first-on-thefollow participant's order for the participant to havefirst-on-the-follow rights to the incoming contra order. One skilled inthe art will recognize that other size criteria may apply. According toan embodiment of the invention, a hidden size of the incoming contraorder may also count towards satisfying the size requirement. If theincoming order does not satisfy the size requirement, the order may beclear to all participants.

According to another embodiment of the invention as shown in FIG. 9, fora participant to have first-on-the-follow rights to an incoming contraorder the order must satisfy a price criteria relative to the price ofthe order of the first-on-the follow participant. For example, accordingto an embodiment of the invention, the price of the incoming contraorder must within a predetermined price delta (e.g., difference) of theprice of the first-on-the follow participant's order for the participantto have first-on-the-follow rights to the incoming contra order. Oneskilled in the art will recognize that other price criteria may apply.According to an embodiment of the invention, if the incoming order doesnot satisfy the price criteria, the order may be clear to allparticipants.

According to another embodiment of the invention, for a participant tohave first-on-the-follow rights to an incoming contra order the ordermust satisfy any combination of criteria, such as those discussed above.

According to another embodiment of the invention as shown in FIG. 10,for a participant that has an order (e.g., a first-on-the-follow order)and that obtains exclusive/semi-exclusive first-on-the-follow rights inthe second state, to protect the participant's exposure theparticipant's order may be modified without affecting the participant'sfirst-on-the-follow rights to trade on an incoming contra order. Theparticipant's order may be modified such that the size of the order isreduced by some percentage amount, and/or the price of the order isincreased (in the case of an offer)/decreased (in the case of a bid) bysome price delta. According to an embodiment of the invention, thetrading system may be configured to automatically modify the size and/orprice of the order, each by a predetermined size percentage or pricedelta (which percentage or delta may be pre-configured in the system byan administrator, for example, or individually configured by eachparticipant, for example). According to another embodiment of theinvention, each participant may enable/disable the trading system toautomatically modify the size and/or price of the participant's order,each by a predetermined size percentage or price delta (which percentageor delta may be configured by each participant, for example). Accordingto another embodiment of the invention, upon the participant obtainingthe first-on-the-follow rights, for example, the trading system mayprompt the participant to modify the size and/or price of theparticipant's order.

According to an embodiment of the invention, with respect tofirst-on-the-follow rights that only ascribe to a participant once acontra order is input into the trading system as described withreference to FIGS. 5 and 6, for example, the participant's unmodifiedorder may be used to determine if the participant obtains the rightswith respect to a given incoming contra order.

According to an embodiment of the invention, the awarding offirst-on-the-follow rights and/or the trading system transitioning fromthe first state to the second state may trigger the modification of thefirst-on-the-follow participant's order, either by automaticallymodifying the order or prompting the participant to have the ordermodified, as discussed above. According to another embodiment of theinvention, the input of any incoming contra order in the second statemay trigger modification of the first-on-the-follow participant's order.According to another embodiment of the invention, the input of anincoming contra order in the second state to which thefirst-on-the-follow participant has first-on-the-follow rights maytrigger modification of the first on the follow participant's order.According to a further embodiment of the invention, the trading on anincoming contra order in the second state may trigger the modificationof the first-on-the-follow participant's order. One skilled in the artwill recognize that other events may be used to trigger the modificationof a first-on-the-follow participant's order.

According to another embodiment of the invention, rather than thefirst-on-the-follow participant's order being modified as discussedabove, the order may be removed without affecting the participant'sfirst-on-the-follow rights to trade on an incoming contra order. Such afeature may give the appearance to a participant inputting a contraorder that orders are “falling away” in the market. The trading systemmay be configured to remove a first-on-the-follow order as similarlydescribed above. According to a preferred embodiment of the invention,the initial input of a contra order to which the first-on-the-followparticipant has first-on-the-follow rights may trigger the removing ofthe first-on-the-follow order. Nonetheless, any of the above describedtriggering events, or others, may cause the order to be removed.According to an embodiment of the invention, with respect tofirst-on-the-follow rights that only ascribe to a participant once acontra order is input into the trading system as described withreference to FIGS. 5 and 6, for example, the participant's originalorder may be used to determine if the participant obtains thefirst-on-the-follow rights with respect to a given incoming contraorder.

According to another embodiment of the invention, a trading system maybe configured such the first-on-the-follow participant's order isautomatically modified (such as upon input of/trading on the contraorder) only when the contra order meets certain predetermined criteria,such as price and/or size criteria, as similarly described above. Theseprice and/or size criteria may be default configured by the systemand/or stipulated by the participant.

According to another embodiment of the invention as shown in FIG. 11,for a participant that has obtained exclusive first-on-the-follow rightswith respect to an incoming contra order (including, if necessary, anorder that meets required criteria as discussed above with respect toFIGS. 7-9), a trading system may be configured such that the systemautomatically causes the first-on-the-follow participant to trade on theincoming contra order when a second participant indicates a willingnessto trade on the contra order. According to an embodiment of theinvention, the contra order may not be clear to the second participant.According to an embodiment of the invention, the trading system may bedefault configured to automatically cause a first-on-the-followparticipant to trade on an incoming contra order when a secondparticipant indicates a willingness to trade on the contra order.According to another embodiment of the invention, each participant mayenable/disable the trading system to automatically cause theparticipant, upon obtaining the first-on-the-follow rights, to trade inthis manner on an incoming contra order when a second participantindicates a willingness to trade on the contra order. According toanother embodiment of the invention, upon a participant obtaining theexclusive first-on-the-follow rights, the trading system may prompt theparticipant to enable the trading system to automatically cause theparticipant to trade on an incoming contra order when anotherparticipant shows a willingness to trade on the contra order.

According to another embodiment of the invention, for a participant thathas obtained exclusive first-on-the-follow rights with respect to anincoming contra order, rather than a trading system automaticallycausing the participant to automatically trade on the incoming contraorder when a second participant indicates a willingness to trade on thecontra order, the system may only trade on the contra order, in thesecircumstances, if the contra order meets certain predetermined criteria,such as price and/or size criteria, as similarly described above. Theseprice and/or size criteria may be default configured by the systemand/or stipulated by the participant.

According to another embodiment of the invention, a trading system maybe configured such that for a first-on-the-follow participant that hasan order removed as described above, or has no first-on-the-follow orderas described above, the system may automatically cause thefirst-on-the-follow participant to trade on an incoming contra order towhich the participant has obtained exclusive first-on-the-follow rightswhen another participant indicates a willingness to trade on the contraorder even though the first-on-the-follow participant has no order.

Thus, systems and method for defining criteria for obtaining exclusivepriority in electronic trading systems have been provided. It will beunderstood that the foregoing is only illustrative of the principles ofthe invention, and that various modifications can be made by thoseskilled in the art without departing from the scope and spirit of theinvention.

What is claimed is:
 1. A method, comprising: transitioning, by at leastone processor of at least one computing device, an electronic tradingsystem from a first trading state to a second trading state;determining, by the at least one processor, from among a plurality ofbids that are pending at a completion of the first trading state, a bestbid, wherein the best bid comprises a bid having a best price from amongthe plurality of bids, and wherein the best bid is associated with aparticipant; determining, by the at least one processor, that theparticipant associated with the best bid purchased at least a minimumsize in the first trading state; based at least in part on (i)determining the best bid and (ii) determining that the participantassociated with the best bid purchased at least the minimum size in thefirst trading state, awarding, by the at least one processor, theparticipant with a potential right to trade exclusively against at leastone offer received in the second trading state; receiving, by the atleast one processor, an offer in the second trading state; based atleast in part on awarding the participant with the potential right totrade exclusively, determining, by the at least one processor, that theparticipant has a right to trade exclusively against the offer; based atleast in part on determining that the participant has the fight to tradeexclusively against the offer, presenting, by the at least oneprocessor, the offer exclusively to the participant; determining, by theat least one processor, that a different participant indicates awillingness to trade against the offer; and based at least in part on(i) determining that the participant has the right to trade exclusivelyagainst the offer and (ii) determining that the different participantindicates the willingness to trade against the offer, automaticallycausing, by the at least one processor, the participant to trade againstthe offer.
 2. The method of claim 1, wherein determining that thedifferent participant indicates the willingness to trade against theoffer comprises: determining, by the at least one processor, that thedifferent participant has a bid among the plurality of bids that arepending at a completion of the first trading state.
 3. The method ofclaim 1, further comprising: determining, by the at least one processor,that a size of the best bid satisfies a further minimum size; andwherein awarding the participant with the potential right to tradeexclusively comprises: awarding, by the at least one processor, theparticipant with the potential right to trade exclusively based at leastin part on determining that the size of the best bid satisfies thefurther minimum size.
 4. The method of claim 1, further comprising:determining, by the at least one processor, that a size of the best bidexceeds a predetermined percentage of a size of the offer; and whereindetermining that the participant has the right to trade exclusivelyagainst the offer comprises: determining, by the at least one processor,that the participant has the right to trade exclusively against theoffer based at least in part on determining that the size of the bestbid exceeds the predetermined percentage of the size of the offer. 5.The method of claim 1, further comprising: determining, by the at leastone processor, that a difference between a price of the best bid and aprice of the offer is within a predetermined delta; and whereindetermining that the participant has the right to trade exclusivelyagainst the offer comprises: determining, by the at least one processor,that the participant has the right to trade exclusively against theoffer based at least in part on determining that the difference betweenthe price of the best bid and the price of the offer is within thepredetermined delta.
 6. The method of claim 1, further comprising:determining, by the at least one processor, that a size of the offersatisfies a further minimum size; and wherein determining that theparticipant has the fight to trade exclusively against the offercomprises: determining, by the at least one processor, that theparticipant has the right to trade exclusively against the offer basedat least in part on determining that the size of the offer satisfies thefurther minimum size.
 7. The method of claim 1, further comprising:determining, by the at least one processor, that a price of the best bidsatisfies a price criterion with respect to a price of a trade made inthe first state; and wherein awarding the participant with the potentialright to trade exclusively further comprises: awarding, by the at leastone processor, the participant with the potential right to tradeexclusively based at least in part on determining that the price of thebest bid satisfies the price criterion with respect to the price of thetrade made in the first state.
 8. The method of claim 7, wherein theprice criterion comprises the price of the best bid being within apredetermined delta of the price of the trade made in the first state.9. The method of claim 1, further comprising: determining, by the atleast one processor, that a size of the offer exceeds a predeterminedpercentage of a size of the best bid; and wherein determining that theparticipant has the fight to trade exclusively against the offercomprises: determining, by the at least one processor, that theparticipant has the right to trade exclusively against the offer basedat least in part on determining that the size of the offer exceeds thepredetermined percentage of the size of the best bid.
 10. The method ofclaim 1, further comprising: based at least in part on awarding theparticipant with the potential fight to trade exclusively, modifying, bythe at least one processor, the best bid, wherein modifying the best biddoes not affect the potential right to trade exclusively of theparticipant.
 11. The method of claim 10, wherein modifying the best bidcomprises at least one of: reducing, by the at least one processor, asize of the best bid, and decreasing, by the at least one processor, aprice of the best bid.
 12. The method of claim 10, wherein modifying thebest bid comprises: removing, by the at least one processor, the bestbid.
 13. The method of claim 1, wherein presenting the offer exclusivelyto the participant comprises at least one of: causing, by the at leastone processor, the offer to be shown only to the participant; andmaking, by the at least one processor, the offer available to be tradedagainst only by the participant.
 14. The method of claim 1, furthercomprising: determining that the offer has at least one of a best priceand a time priority from among a plurality of offers pending in thesecond trading state; and wherein determining that the participant hasthe fight to trade exclusively against the offer comprises: determining,by the at least one processor, that the participant has the right totrade exclusively against the offer based at least in part ondetermining that the offer has at least one of the best price and thetime priority from among the plurality of offers pending in the secondtrading state.
 15. The method of claim 1, further comprising:determining, by the at least one processor, from among a plurality ofoffers that are pending at the completion of the first trading state, abest offer, wherein the best offer comprises an offer having a bestprice from among the plurality of offers, and wherein the best offer isassociated with another participant; determining, by the at least oneprocessor, that the another participant associated with the best offersold at least a second minimum size in the first trading state; andbased at least in part on (i) determining the best offer and (ii)determining that the another participant associated with the best offersold at least the second minimum size in the first trading state,awarding, by the at least one processor, the another participant with apotential right to trade exclusively against at least one bid receivedin the second trading state.
 16. The method of claim 15, furthercomprising: based at least in part on awarding the another participantwith the potential right to trade exclusively against the at least onebid received in the second trading state, modifying, by the at least oneprocessor, the best offer, wherein modifying the best offer does notaffect the potential right to trade exclusively of the anotherparticipant, and wherein modifying the best offer comprises at least oneof: reducing, by the at least one processor, a size of the best offer,and increasing, by the at least one processor, a price of the bestoffer, and removing, by the at least one processor, the best offer. 17.The method of claim 1, further comprising: based at least in part ondetermining that the participant has the right to trade exclusivelyagainst the offer, modifying, by the at least one processor, the bestbid.
 18. The method of claim 17, wherein modifying the best bidcomprises at least one of: reducing, by the at least one processor, asize of the best bid, and decreasing, by the at least one processor, aprice of the best bid.
 19. The method of claim 17, wherein modifying thebest bid comprises: removing, by the at least one processor, the bestbid.
 20. The method of claim 1, wherein the second minimum size is equalto the minimum size.
 21. An apparatus: comprising: at least oneprocessor; and at least one memory device electronically coupled to theat least one processor, wherein the at least one memory device storesinstructions which, when executed by the at least one processor, directthe at least one processor to: transition an electronic trading systemfrom a first trading state to a second trading state, determine, fromamong a plurality of bids that are pending at a completion of the firsttrading state, a best bid, wherein the best bid comprises a bid having abest price from among the plurality of bids having a best price, andwherein the best bid is associated with a participant; determine thatthe participant associated with the best bid purchased at least aminimum size in the first trading state; based at least in part on (i)determining the best bid and (ii) determining that the participantassociated with the best bid purchased at least the minimum size in thefirst trading state, award the participant with a potential fight totrade exclusively against at least one offer received in the secondtrading state; receive an offer in the second trading state, based atleast in part on awarding the participant with the potential right totrade exclusively, determine that the participant has a fight to tradeexclusively against the offer; based at least in part on determiningthat the participant has the fight to trade exclusively against theoffer, present the offer exclusively to the participant; determine thata different participant indicates a willingness to trade against theoffer; and based at least in part on (i) determining that theparticipant has the right to trade exclusively against the offer and(ii) determining that the different participant indicates thewillingness to trade against the offer, automatically causing theparticipant to trade against the offer.
 22. The apparatus of claim 21,wherein presenting the offer exclusively to the participant comprises atleast one of: causing the offer to be shown only to the participant; andmaking the offer available to be traded against only by the participant.23. The apparatus of claim 21, wherein the instructions, when executedby the at least one processor, further direct the at least one processorto: determine that the offer has at least one of a best price and a timepriority from among a plurality of offers pending in the second tradingstate; and wherein determining that the participant has the fight totrade exclusively against the offer comprises: determining that theparticipant has the right to trade exclusively against the offer basedat least in part on determining that the offer has at least one of thebest price and the time priority from among the plurality of offerspending in the second trading state.
 24. The apparatus of claim 21,wherein the instructions, when executed by the at least one processor,further direct the at least one processor to: determine, from among aplurality of offers that are pending at the completion of the firsttrading state, a best offer, wherein the best offer comprises an offerhaving a best price from among the plurality of offers, and wherein thebest offer is associated with another participant; determine that theanother participant associated with the best offer sold at least asecond minimum size in the first trading state; and based at least inpart on (i) determining the best offer and (ii) determining that theanother participant associated with the best offer sold at least thesecond minimum size in the first trading state, award the anotherparticipant with a potential right to trade exclusively against at leastone bid received in the second trading state.
 25. The apparatus of claim24, wherein the instructions, when executed by the at least oneprocessor, further direct the at least one processor to: based at leastin part on awarding the another participant with the potential right totrade exclusively against the at least one bid received in the secondtrading state, modify the best offer, wherein modifying the best offerdoes not affect the potential right to trade exclusively of the anotherparticipant, and wherein modifying the best offer comprises at least oneof: reducing a size of the best offer, and increasing a price of thebest offer, and removing the best offer.
 26. The apparatus of claim 21,wherein wherein determining that the different participant indicates thewillingness to trade against the offer comprises: determining, by the atleast one processor, that the different participant has a bid among theplurality of bids that are pending at a completion of the first tradingstate.
 27. The apparatus of claim 21, wherein the instructions, whenexecuted by the at least one processor, further direct the at least oneprocessor to: determine that a size of the best bid satisfies a furtherminimum size, and wherein awarding the participant with the potentialright to trade exclusively comprises: awarding the participant with thepotential right to trade exclusively based at least in part ondetermining that the size of the best bid satisfies the further minimumsize.
 28. The apparatus of claim 21, wherein the instructions, whenexecuted by the at least one processor, further direct the at least oneprocessor to: determine that a size of the best bid exceeds apredetermined percentage of a size of the offer; and wherein determiningthat the participant has the fight to trade exclusively against theoffer comprises: determining that the participant has the right to tradeexclusively against the offer based at least in part on determining thatthe size of the best bid exceeds the predetermined percentage of thesize of the offer.
 29. The apparatus of claim 21, wherein theinstructions, when executed by the at least one processor, furtherdirect the at least one processor to: determine that a differencebetween a price of the best bid and a price of the offer is within apredetermined delta; and wherein determining that the participant hasthe fight to trade exclusively against the offer comprises: determiningthat the participant has the right to trade exclusively against theoffer based at least in part on determining that the difference betweenthe price of the best bid and the price of the offer is within thepredetermined delta.
 30. The apparatus of claim 21, wherein theinstructions, when executed by the at least one processor, furtherdirect the at least one processor to: determine that a size of the offersatisfies a further minimum size; and wherein determining that theparticipant has the right to trade exclusively against the offercomprises: determining that the participant has the right to tradeexclusively against the offer based at least in part on determining thatthe size of the offer satisfies the further minimum size.
 31. Theapparatus of claim 21, wherein the instructions, when executed by the atleast one processor, further direct the at least one processor to:determine that a size of the offer exceeds a predetermined percentage ofa size of the best bid; and wherein determining that the participant hasthe right to trade exclusively against the offer comprises: determiningthat the participant has the right to trade exclusively against theoffer based at least in part on determining that the size of the offerexceeds the predetermined percentage of the size of the best bid. 32.The apparatus of claim 21, wherein the instructions, when executed bythe at least one processor, further direct the at least one processorto: determine that a price of the best bid is within a predetermineddelta of a price of a trade made in the first state; and whereinawarding the participant with the potential right to trade exclusivelyfurther comprises: awarding the participant with the potential right totrade exclusively based at least in part on determining that the priceof the best bid is within the predetermined delta of the price of thetrade made in the first state.
 33. The apparatus of claim 21, whereinthe instructions, when executed by the at least one processor, furtherdirect the at least one processor to: based at least in part ondetermining that the participant has the right to trade exclusivelyagainst the offer, modify the best bid.
 34. The apparatus of claim 33,wherein modifying the best bid comprises at least one of: reducing asize of the best bid, and decreasing a price of the best bid.
 35. Theapparatus of claim 33, wherein modifying the best bid comprises:removing the best bid.
 36. The apparatus of claim 21, wherein theinstructions, when executed by the at least one processor, furtherdirect the at least one processor to: based at least in part on awardingthe participant with the potential right to trade exclusively, modifythe best bid, wherein modifying the best bid does not affect thepotential right to trade exclusively of the participant.
 37. Theapparatus of claim 36, wherein modifying the best bid comprises at leastone of: reducing a size of the best bid, and decreasing a price of thebest bid.
 38. The apparatus of claim 36, wherein modifying the best bidcomprises: removing the best bid.
 39. The apparatus of claim 21, whereinthe second minimum size is equal to the minimum size.
 40. A computerreadable medium comprising a program that, when executed by at least onecomputing device, directs the at least one computing device to:transition an electronic trading system from a first trading state to asecond trading state, determine, from among a plurality of bids that arepending at a completion of the first trading state, a best bid, whereinthe best bid comprises a bid having a best price from among theplurality of bids, and wherein the best bid is associated with aparticipant; determine that the participant associated with the best bidpurchased at least a minimum size in the first trading state; based atleast in part on (i) determining the best bid and (ii) determining thatthe participant associated with the best bid purchased at least theminimum size in the first trading state, award the participant with apotential fight to trade exclusively against at least one offer receivedin the second trading state; receive an offer in the second tradingstate, based at least in part on awarding the participant with thepotential fight to trade exclusively, determine that the participant hasa right to trade exclusively against the offer; based at least in parton determining that the participant has the fight to trade exclusivelyagainst the offer, present the offer exclusively to the participant;determine that a different participant indicates a willingness to tradeagainst the offer; and based at least in part on (i) determining thatthe participant has the right to trade exclusively against the offer and(ii) determining that the different participant indicates thewillingness to trade against the offer, automatically causing theparticipant to trade against the offer.
 41. The computer readable mediumof claim 40, wherein determining that the different participantindicates the willingness to trade against the offer comprises:determining that the different participant has a bid among the pluralityof bids that are pending at a completion of the first trading state. 42.The computer readable medium of claim 40, wherein the instructions, whenexecuted by the at least one computing device, further direct the atleast one computing device to: determine that the offer has at least oneof a best price and a time priority from among a plurality of offerspending in the second trading state; and wherein determining that theparticipant has the fight to trade exclusively against the offercomprises: determining that the participant has the right to tradeexclusively against the offer based at least in part on determining thatthe offer has at least one of the best price and the time priority fromamong the plurality of offers pending in the bid/offer second tradingstate.
 43. The computer readable medium of claim 40, wherein theinstructions, when executed by the at least one computing device,further direct the at least one computing device to: determine, fromamong a plurality of offers that are pending at the completion of thefirst trading state, a best offer, wherein the best offer comprises anoffer having a best price from among the plurality of offers, andwherein the best offer is associated with another participant; determinethat the another participant associated with the best offer sold atleast a second minimum size in the first trading state; and based atleast in part on (i) determining the best offer and (ii) determiningthat the another participant associated with the best offer sold atleast the second minimum size in the first trading state, award theanother participant with a potential right to trade exclusively againstat least one bid received in the second trading state.
 44. The computerreadable medium of claim 43, wherein the instructions, when executed bythe at least one computing device, further direct the at least onecomputing device to: based at least in part on awarding the anotherparticipant with the potential right to trade exclusively against the atleast one bid received in the second trading state, modify the bestoffer, wherein modifying the best offer does not affect the potentialright to trade exclusively of the another participant, and whereinmodifying the best offer comprises at least one of: reducing a size ofthe best offer, and increasing a price of the best offer, and removingthe best offer.
 45. The computer readable medium of claim 40, whereinthe instructions, when executed by the at least one computing device,further direct the at least one computing device to: determine that asize of the best bid satisfies a further minimum size; and whereinawarding the participant with the potential right to trade exclusivelycomprises: awarding the participant with the potential right to tradeexclusively based at least in part on determining that the size of thebest bid satisfies the further minimum size.
 46. The computer readablemedium of claim 40, wherein the instructions, when executed by the atleast one computing device, further direct the at least one computingdevice to: determine that a size of the best bid exceeds a predeterminedpercentage of a size of the offer; and wherein determining that theparticipant has the fight to trade exclusively against the offercomprises: determining that the participant has the right to tradeexclusively against the offer based at least in part on determining thatthe size of the best bid exceeds the predetermined percentage of thesize of the offer.
 47. The computer readable medium of claim 40, whereinthe instructions, when executed by the at least one computing device,further direct the at least one computing device to: determine that adifference between a price of the best bid and a price of the offer iswithin a predetermined delta; and wherein determining that theparticipant has the fight to trade exclusively against the offercomprises: determining that the participant has the right to tradeexclusively against the offer based at least in part on determining thatthe difference between the price of the best bid and the price of theoffer is within the predetermined delta.
 48. The computer readablemedium of claim 40, wherein the instructions, when executed by the atleast one computing device, further direct the at least one computingdevice to: determine that a size of the offer satisfies a furtherminimum size; and wherein determining that the participant has the rightto trade exclusively against the offer comprises: determining that theparticipant has the right to trade exclusively against the offer basedat least in part on determining that the size of the offer satisfies thefurther minimum size.
 49. The computer readable medium of claim 40,wherein the instructions, when executed by the at least one computingdevice, further direct the at least one computing device to: determinethat a size of the offer exceeds a predetermined percentage of a size ofthe best bid; and wherein determining that the participant has the rightto trade exclusively against the offer comprises: determining that theparticipant has the right to trade exclusively against the offer basedat least in part on determining that the size of the offer exceeds thepredetermined percentage of the size of the best bid.
 50. The computerreadable medium of claim 40, wherein the instructions, when executed bythe at least one computing device, further direct the at least onecomputing device to: determine that a price of the best bid is within apredetermined delta of a price of a trade made in the first state; andwherein awarding the participant with the potential right to tradeexclusively further comprises: awarding the participant with thepotential right to trade exclusively based at least in part ondetermining that the price of the best bid is within the predetermineddelta of the price of the trade made in the first state.
 51. Thecomputer readable medium of claim 40, wherein the instructions, whenexecuted by the at least one computing device, further direct the atleast one computing device to: based at least in part on determiningthat the participant has the right to trade exclusively against theoffer, modify the best bid.
 52. The computer readable medium of claim51, wherein modifying the best bid comprises at least one of: reducing asize of the best bid, and decreasing a price of the best bid.
 53. Thecomputer readable medium of claim 51, wherein modifying the best bidcomprises: removing the best bid.
 54. The computer readable medium ofclaim 40, wherein the instructions, when executed by the at least onecomputing device, further direct the at least one computing device to:based at least in part on awarding the participant with the potentialright to trade exclusively, modify the best bid, wherein modifying thebest bid does not affect the potential right to trade exclusively of theparticipant.
 55. The computer readable medium of claim 54, whereinmodify modifying the best bid comprises at least one of: reducing a sizeof the best bid, and decreasing a price of the best bid.
 56. Thecomputer readable medium of claim 54, wherein modifying the best bidcomprises: removing the best bid.
 57. The computer readable medium ofclaim 40, wherein the second minimum size is equal to the minimum size.